Voters would decide on gas tax hike to fund schools under proposed deal between lawmakers and Our Schools Now

Legislative sources tell that Our Schools Now is negotiating with lawmakers on a proposal that could pump $300 million into Utah’s schools every year.

Top backers of OSN met with House and Senate Republicans on Monday afternoon.

On the table is a measure for lawmakers to put a $0.10 per gallon gas tax increase on November’s ballot. If voters approve that ballot initiative, it would provide approximately $100 million per year in much-needed funding for transportation, and free up funds from the general fund that would then go toward education.

Lawmakers would also freeze the basic property tax level, which currently sits around 15%. Legislators say “truth in taxation” laws have caused the property tax base to shrink, diminishing the funding that goes to schools. That measure could pump another $200 million into school coffers every year.

If lawmakers agree to those two provisions, Our Schools Now is offering to pull their ballot initiative instead of proceeding to November’s ballot.

The $300 million on the table is less than half of the $700 million annually that OSN was pushing through a possible voter-approved sales and property tax hike. Polls show Utahns support the OSN ballot initiative, but it’s far from a slam dunk. The latest survey finds just 54% of Utahns favor the tax hike proposals for schools, which is up slightly from our November survey when 50% of Utahns favored the OSN ballot initiative.

There is a fear if the OSN proposal fails at the ballot box, it would embolden future legislatures to de-emphasize education funding.

From the OSN side, the backers of the income/sales tax-hike petition will just have to trust the Republican majority in the Legislature and GOP Gov. Gary Herbert (at least through Herbert’s remaining years in office).

It is against the law for one Legislature to bind a future Legislature. So technically, if a deal is struck, future legislatures cannot be forced to comply with the pact.

But if voters agree to a 10-cent-per-gallon increase in the gasoline tax, with the understanding that the $100 million per year it generates will flow, through a series of budget switches, back to the general fund where it will be allocated to public schools, then future Legislatures will not want to break a promise to voters – or so the political thinking goes.

And there are both party and personal politics in play here.

Yes, if OSN pulls its initiative, there won’t be a 0.45 percent increase in both the personal income and state sales taxes on the November ballot.

But, it means legislative Republicans will be placing a tax hike on the ballot during an election year, which is always an iffy proposition.

OSN officials tell they would keep their fund-raising campaign going even if they drop their initiative. And OSN would then be publicly pushing for whatever lawmakers ultimately place on the ballot for voters to approve — as it could ultimately mean millions more in funding for the state’s cash-starved schools.

Will GOP lawmakers and Herbert – who today are AGAINST the OSN petition — reverse course and actively BACK the gas tax hike?

That may be a tough sell on the Hill, especially with just three days left in the 2018 session. 

It’s not clear whether House or Senate Republicans will ultimately go for the proposal in the final three days of the 2018 session.